What is a chapter 7 bankruptcy?
Chapter 7 is one type of bankruptcy procedure designed to eliminate most debt. These procedures are called "chapter 7 bankruptcies" because they are outlined in chapter 7 of the Bankruptcy Code. Chapter 7 bankruptcies are also called "fresh start" or "liquidation" bankruptcies. In general, you will not be able to file under chapter 7 if your monthly disposable income is too high. Instead, you will need to file under chapter 13.
What is a chapter 13 bankruptcy?
Chapter 13 (sometimes called a "wage-earner plan") allows an individual to pay his or her debts over an extended period using a court-approved, supervised, and enforced payment plan. In many cases, some creditors may be paid in full and some amounts may be discharged).
What happens to my assets during a bankruptcy?
It's a common belief that you will lose everything if you file for bankruptcy, but that is not necessarily the case. How much you can keep depends on the type of bankruptcy you file, the value of your property, the amount of your debts, and the state in which you live.
How can filing for bankruptcy help with creditors?
After you have prepared and filed your bankruptcy paperwork, the court clerk will notify all of your creditors of your bankruptcy filing and inform them that they may no longer contact you. If your creditors continue to pursue you after receiving notice of your bankruptcy, they may be subject to sanctions by the bankruptcy court.